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    Classwork 1

    Uploaded by

    Shana Villamor
    Here are the adjusting entries needed to complete the trial balance: 1. Uncollectible Accounts Expense 50,000 Allowance for Doubtful Accounts 50,000 2. Insurance Expense 16,667 Prepaid Insurance 16,667 3. Depreciation Expense - Office Equipment 75,000 Accumulated Depreciation - Office Equipment 75,000 4. Depreciation Expense - Automobile 130,000 Accumulated Depreciation - Automobile 130,000 5. Management Fees Earned 120,000 Unearned Management Fees 120,000 6. Utility Expense 60,000 Utility Expense 60,000

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    © All Rights Reserved
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    Classwork 1

    Uploaded by

    Shana Villamor
    19 views4 pages
    Here are the adjusting entries needed to complete the trial balance: 1. Uncollectible Accounts Expense 50,000 Allowance for Doubtful Accounts 50,000 2. Insurance Expense 16,667 Prepaid Insurance 16,667 3. Depreciation Expense - Office Equipment 75,000 Accumulated Depreciation - Office Equipment 75,000 4. Depreciation Expense - Automobile 130,000 Accumulated Depreciation - Automobile 130,000 5. Management Fees Earned 120,000 Unearned Management Fees 120,000 6. Utility Expense 60,000 Utility Expense 60,000

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    Here are the adjusting entries needed to complete the trial balance: 1. Uncollectible Accounts Expense 50,000 Allowance for Doubtful Accounts 50,000 2. Insurance Expense 16,667 Prepaid Insurance 16,667 3. Depreciation Expense - Office Equipment 75,000 Accumulated Depreciation - Office Equipment 75,000 4. Depreciation Expense - Automobile 130,000 Accumulated Depreciation - Automobile 130,000 5. Management Fees Earned 120,000 Unearned Management Fees 120,000 6. Utility Expense 60,000 Utility Expense 60,000

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    19 views4 pages

    Classwork 1

    Uploaded by

    Shana Villamor
    Here are the adjusting entries needed to complete the trial balance: 1. Uncollectible Accounts Expense 50,000 Allowance for Doubtful Accounts 50,000 2. Insurance Expense 16,667 Prepaid Insurance 16,667 3. Depreciation Expense - Office Equipment 75,000 Accumulated Depreciation - Office Equipment 75,000 4. Depreciation Expense - Automobile 130,000 Accumulated Depreciation - Automobile 130,000 5. Management Fees Earned 120,000 Unearned Management Fees 120,000 6. Utility Expense 60,000 Utility Expense 60,000

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 4

    Ateneo de Naga University ACCM131 – Elementary Accounting 2

    Review of the Accounting Process

    Name: SHANA VILLAMOR Section: AC11Am

    I. Accounting Cycle
    Arrange the 10 steps in the accounting cycle in their correct order by writing the letter on the
    space provided in the first column.

    1. E A. Preparation of a Trial Balance


    2. H B. Preparation of a Post-Closing Trial Balance
    3. F C. Preparation of the Worksheet including Adjusting Entries
    4. A D. Adjusting Journal Entries are Journalized and Posted
    5. C E. Identification of Events to be Recorded
    6. I F. Journal Entries are Posted to the Ledger
    7. D G. Reversing Journal Entries are Journalized and Posted
    8. J H. Transactions are Recorded in the Journal
    9. B I. Preparation of the Financial Statements
    10. G J. Closing Entries are Journalized and Posted

    II. Adjusting and Reversing Entries

    ABC Merchandising follows the policy of recording prepayments in revenue and expense
    accounts and reverses appropriate adjusting entries at the beginning of the new accounting
    period. The records of the business show the following:

    a. On March 1, 2009, ABC borrowed P2,000,000 cash form the Bank of the Philippine
    Island (BPI) by issuing a 6% note payable in one year. The interest is payable upon
    maturity of the note.
    b. On July 1, 2009, ABC paid insurance premium of P72,000 covering a period of three
    years beginning on this date.
    c. On September 1, 2009, ABC paid P360,000 representing rental for one year starting on
    this date.
    d. ABC reports accounts receivable of P500,000 and allowance for uncollectible accounts of
    P1,000 (debit balance); P5,000 of the receivables are uncollectible.
    e. ABC pays all employees every Friday. The total payroll for the five-day workweek ending
    January 3, 2010 is P150,000.
    f. ABC purchased office equipment on April 1, 2008 amounting to P120,000. On January
    1, 2009, the office equipment account has a balance of P480,000. All equipment have
    estimated useful life of 5 years with no residual value.
    g. Office supplies on hand on January 1, 2009 amounted to P5,000. During the year, office
    supplies of P12,500 were purchased. On December 31, 2009, there are unused supplies
    of P3,500.
    h. ABC subleases part of its office space for P10,000 per month. On November 1, 2009, it
    received rental payments for six months starting on this date.
    i. Merchandise inventory on January 1 and December 31 amounted to P100,000 and
    P120,000, respectively.

    Instructions:
    1. Prepare the necessary adjusting entries on December 31, 2009.
    2. Prepare appropriate reversing entries as of January 1, 2010.

    1. Adjusting entries on Dec. 31, 2009


    a Interest Expense 100,000
    .
    Interest Payable 100,000
    b Insurance Expense 12,000
    .
    Interest Payable 12,000
    c. Rent Expense 120,000
    Prepaid Rent 120,000
    d Uncollectible Accounts Expense 6,000
    .
    Allowance for Doubtful Accounts 6,000
    e Salaries Expense 60,000
    .
    Salaries Payable 60,000
    Ateneo de Naga University ACCM131 – Elementary Accounting 2
    Review of the Accounting Process

    f. Depreciation Expense – Office 96,000


    Equipment
    Accumulated Depreciation 96,000
    g Supplies Expense 14,000
    .
    Supplies 14,000
    h Unearned Rent Revenue 10,000
    .
    Rent Revenue 10,000
    i.Income Summary 100,000
    Merchandise Inventory, Jan 1 100,000
    Merchandise Inventory, Dec 31 120,000
    Income Summary 120,000
    3. Reversing entries as of January 1, 2010
    Interest Payable 100,000
    Interest Expense 100,000
    Insurance Payable 12,000
    Insurance Expense 12,000
    Prepaid Rent 120,000
    Rent Expense 120,000
    Salaries Payable 60,000
    Salaries Expense 60,000
    Rent Revenue 10,000
    Unearned Rent 10,000
    Revenue

    III. Adjusting and Reversing Entries

    The following are selected transactions of the DEF Trading during the year 2009:

    a. On July 1, 2009, the company received P270,000 representing rental payments for the
    period July 1, 2000 to December 31, 2010.
    b. On October 1, 2009, an insurance premium of P90,000 was paid covering a period of two
    years beginning on this date.

    Instructions: Provide the necessary adjusting entries as of December 31, 2009 and
    appropriate reversing entries as of January 1, 2010 assuming:
    1. Transactions were originally recorded in asset and liability accounts.
    2. Transactions were originally recorded in expenses and revenue accounts.

    Adjusting Entries:
    a.
    Liability:
    Unearned Revenue 180,000
    Rent Revenue 180,000
    Revenue:
    Insurance 90,000
    Unearned Rent Revenue 90,000
    b.
    Asset:
    Insurance Expense 11,250
    Prepaid Insurance 11,250
    Expense:
    Prepaid Insurance 78,750
    Insurance Expense 78,750

    Reversing Entries:
    Unearned Rent Revenue 90,000
    Rent Revenue 90,000
    Ateneo de Naga University ACCM131 – Elementary Accounting 2
    Review of the Accounting Process

    Prepaid Insurance 78,750


    Insurance Expense 78,750

    IV. Adjusting and Reversing Entries

    Give the account/s to be credited to complete the adjusting entries below:

    Debit Credit

    1. Uncollectible Accounts Expense Allowance for Doubtful Accounts


    2. Prepaid Rent Rent Expense
    3. Office Supplies on Hand Supplies
    4. Salary Expense Salaries Payable
    5. Insurance Expense Prepaid Insurance
    6. Interest Receivable Interest Revenue
    7. Interest Expense Interest Payable
    8. Rent Income Unearned Rent Income
    9. Depreciation Expense Accumulated Depreciation
    10. Inventory, end Income Summary

    V. Adjusting Entries

    The XYZ Realty operates with an annual accounting period that ends on December 31. The trial
    balance of the company at the end of the current year follows:

    Debit Credit
    Cash 1,300,000
    Accounts Receivable 550,000
    Prepaid Insurance 50,000
    Office Equipment 750,000
    Acc. Depreciation-Off. Eqpt. 150,000
    Automobile 1,300,000
    Acc. Depreciation-Automobile 260,000
    Accounts Payable 110,000
    Unearned Management Fees 120,000
    Primo, Capital 840,000
    Primo, Drawing 350,000
    Management Fees Earned 3,600,000
    Office Salaries Expense 450,000
    Advertising Expense 100,000
    Rent Expense 150,000
    Telephone Expense 30,000
    Utility Expense 50,000
    ------------------------- --------------------------
    5,080,000 5,080,000
    ============== ===============

    Data for adjustment:


    1. Expired insurance during the year amounted to P30,000.
    2. Depreciation expense for the year: office equipment – P75,000; automobile – P260,000.
    3. The balance of unearned management fees represents advance payments for six months
    starting September 1, 2009.
    4. Advertising expense represents a five-month advertising beginning October 1, 2009.

    Instructions: Prepare the necessary adjusting entries as of December 31, 2009.

    Adjusting entries as of December 31, 2009


    1. Insurance Expense 30,000
    Prepaid Insurance 30,000
    2. Depreciation Expense – Office Equipment 75,000
    Ateneo de Naga University ACCM131 – Elementary Accounting 2
    Review of the Accounting Process

    Accumulated Depreciation – Office 75,000


    Equipment
    Depreciation Expense – Automobile 260,000
    Accumulated Depreciation – 260,000
    Automobile
    3. Unearned Rent Revenue 80,000
    Rent Revenue 80,000
    4. Advertising Expense 60,000
    Prepaid Advertising 60,000

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